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Redeye VC

A view of the startup ecosystem from a coastally challenged VC

First Round Capital Office Hours (and Free Coffee)October 15 2008

We live in interesting times.   Despite the recent doom and gloom forecasts for startup companies, we at First Round Capital are still investing in new companies and actively seeking talented entrepreneurs to back.  My colleagues on the west coast are holding our first Office Hours next Thursday. As Kent wrote in his blog post:

"At Office Hours, we’d love to meet with entrepreneurs, people thinking about becoming entrepreneurs or folks who would like join a start-up. We’ll be available for a bunch of informal ~15 minute chats. There’s no agenda. Ask us what we think of the market environment or share an idea for a company – we’ll be sure to have plenty of napkins available to help draft that first product plan. We’ll listen, share our perspective and pay for the coffee (which may be of more value than our advice).

When: Tuesday, October 21st , 11am – 1pm
Where: University Café, 271 University Ave, Palo Alto, CA 94301

All are welcome -- if

LeaveWallStreetJoinAStartup.comSeptember 16 2008

For years, one of the biggest challenges facing New York city based startup companies has been the competition for technical talent.   It was very difficult for a venture-backed startup to compete with the compensation packages offered by the big investment banks.  Stock options had a hard-time overcoming oversized cash bonuses.

While no one is happy with the turmoil we're seeing facing the financial services sector, and no one is happy to see mass layoffs, this does represent an opportunity for startup companies to attract seasoned, technical talent.  With Bear Stearns laying off over 7,000 employees, Lehman Brothers rumored to layoff over 20,000 employees, and Merrill Lynch expected to layoff thousands after their sale to Bank of America, we're on track to see over 150,000 people lose their jobs this year.

If you are one of those 150,000 employees, you might want to consider joining a startup.  These days, startups are more stable than Wall Street (seriously).  And while a startup probably won't offer the creature comforts of a job in the financial services industry, startups offer different benefits.  You get to partic

Announcing FundingSleuth.comJuly 17 2008

About 10 years ago, I helped create a web service called Company Sleuth.  The basic premise was that as a company conducted its business activities, it would leave a "paper trail" online.  And Company Sleuth tried to find that trail by automatically searching a variety of public databases (such as the US patent database, trademark database, domain registrations, job listings, etc.) for "clues" about all US public companies activities.  Users would tell Company Sleuth the companies they cared about and receive a daily email containing a list of all new "clues" that were found.

The service found some interesting data.  For example, while in beta we saw that the domain name "daimlerchrysler.com" was registered by Skadden Arps (Daimler's law firm) days before the deal was announced.  And we also noticed that MCI Worldcom re

The Story of Francis BatesJuly 2 2008

I've spent some time the past few weeks researching the life of a little known Silicon Valley entrepreneur named Francis Bates.  Here's his story:

Francis Bates was born in 1847 in Rhode Island.  His mother, Amy Ann, passed away when he was just 11 days old.  During his childhood, young Francis needed to assume many of the household chores -- make his bed, take out the trash, and fetch the mail.  While making his bed and taking out the trash weren't that bad, Francis really hated fetching the mail.  You see, the Bates house was located off the beaten path -- and pretty far from the main road.  And since his Dad wanted to read the mail immediately after it was delivered, Francis was constantly checking to see if there was mail in his mailbox.  In fact, Francis spent most of his mornings walking back and forth to his mailbox.  Most of the time it was empty, but from time to time he would find something in it. 

During the Civil War, Francis joined the Army and was injured.  In pursuit of health, Mr. Bates came to California in 1896 and settled in San Jose.  Like his childhood home in Rhode Island, his house in California was also a great distance from the road.  Francis reall

The Death of Stealth ModeJune 24 2008

Let's put this post in the category of "Things I wish lawyers told their startup clients."

Here's a situation I see all the time: 

A pre-launch, stealth-mode company just closes a seed round of funding.  Three weeks go by, and the news of the company's funding starts appears in VentureBeat, PEHub, and Venturewire.  The story is then picked up by mainstream tech bloggers and press.  The CEO starts getting phone calls from journalists.  I then receive frantic, angry phone calls and emails from the CEO that go something like this: "Dude!  Did you announce the funding?  We wanted to stay under the radar..."

I want to reply, "No.  I didn't announce the funding.  Your lawyer did."

The answer is culprit is a little known SEC regulation called "Regulation D".  A basic summary:

Under the Securities Act of 1933, any offer to sell securities must either be registered with the SEC or meet an exemption. Regulation D (or Reg D) contains three rules providing exempt